On Wednesday, March 19, 2025, the Michigan House of Representatives passed House Bills 4180, 4187, and 4230. If the bill package becomes law, it would reallocate funds from the state’s corporate tax rate, which was funding corporate welfare programs, and instead direct an estimated $2.2 billion to fix Michigan’s roads.
Gov. Gretchen Whitmer outlined a plan in February to raise funds to repair Michigan’s roads, a promise she made in 2018. Whitmer proposed raising the corporate income tax by an unspecified amount. However, analysts estimate that the CIT would have to be raised to 8.5% from its current 6% to cover the costs of fixing the state’s crumbling roads. An 8.5% CIT would equal the rate charged in California.
Whitmer’s plan would also increase taxes on gas and marijuana.
The plan reallocates existing state revenue, avoids raising taxes, and ensures that road repair efforts are adequately funded. It aims to shift $2.2 billion from CIT to road repairs, particularly local roads. By eliminating the use of outdated Michigan Economic Growth Authority tax credits, the plan aims to increase CIT revenue, which would be redirected toward road maintenance.
Republicans on Wednesday expressed their support for the bill package by contrasting it with Whitmer’s plan.
“Our roads have been neglected for too long,” Rep. Tom Kunse, R-Clare, said in his remarks from the House floor. “The comprehensive road funding plan does this. It fixes the problem without raising taxes.”
Kunse noted that Michigan residents have been waiting seven years for a workable plan to fix the state’s roads.
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“The state’s been letting a few huge downstate businesses cheat the system for far too long. If single mothers, union workers, and college students are all expected to help fund our roads through a gas tax at the pump, it’s only right that huge corporations pay their fair share in taxes too,” Rep. Bohnak, R-Deerton, said in a statement.
The Republican plan also proposes eliminating the 6% sales tax on gas and replacing it with a 20-cent increase in the motor fuel tax. The new tax structure would ensure that all gas tax revenue is directly allocated to road repairs, a move designed to make road funding more transparent and accountable.
Additionally, $755 million from the General Fund would backfill losses to the School Aid Fund, ensuring that Michigan schools continue receiving funding despite the gas tax revenue changes. $95 million would also be directed to cities, counties, and villages that previously received sales tax funds for road maintenance.
Rep. Pat Outman, R-Six Lakes, chair of the House Transportation Committee, emphasized that the plan aims to eliminate wasteful spending to ensure essential services remain protected.
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“I don’t know how to make it any clearer how much government spending has exploded here in the state of Michigan,” Outman said. “If roads and education are our most pressing needs, why don’t we fund those things first, then fund everything else after the fact?”
The $3.1 billion road funding plan marks a significant step forward but still faces hurdles in the Senate and requires Whitmer’s signature.